The spectre of self-organization

A spectre is haunting the VUKA world - the spectre of self-organisation. Companies are being jointly controlled, management tasks distributed and decision-making authority decentralized.

Some see an evil spook at work: they fear grassroots democracy, anarchy, chaos. Others, however, like to see self-organization as a good spirit: People expect more motivation, better work results and higher customer satisfaction. Not a bad promise of happiness, we think.

But what is it that has been haunting many companies lately? Which ghosts come into action when self-organization is the order of the day? And why should we not be surprised that we can no longer get rid of these ghosts?

Based on the so-called C/D/E model of the American sociologist Glenda Eoyang, it can be explained how self-organization comes about. Ultimately, only four ingredients are needed for this:

1.) A powerful mission that is aligned with customers, clients and stakeholders and translated into specific goals (see red or red-bordered boxes).

2.) Frameworks that keep your organization on track. It is the task of the management (see orange circle) to design this framework in such a way that the experts can work in the best possible way: from clear decision rules to transparent information flows to short feedback loops (with Eoyang C for containing boundary).

3.) Differences in knowledge, experience, education or cultural background (D for differences).

4.) Exchange within the team and with the relevant environments of the system, first and foremost the customers (E for exchange).

From a systemic point of view, self-organization takes place all the time; it is, as it were, the natural way in which social order comes about - the only question is to what extent and with what consistency this happens. In recent years, self-direction has been given more room in many places, especially where agile methods have been used. Unfortunately, Scrum, Kanban, Design Thinking & Co often remain limited to individual teams and special departments.

The 40 companies that Sigi Kaltenecker explores in his new book "(Self-Organized Companies)" show that things can be done differently.

The dream of an overall organization that is as responsive as it is innovative is by no means unattainable. The wide range of practical examples extends from pioneers such as the textile manufacturer Gore or the mechanical engineering company Semco to trendsetters such as the tomato producer Morning Star or the music platform Spotify to up-and-coming newcomers such as the telecommunications expert sipgate or the software testers from Computest.

Across a wide range of industries, contexts and sizes, these companies rely on a remarkably similar set of principles and practices: for example, the transparent management of work processes, the primacy of customer-focused decision-making through deliberate delegation of authority, short feedback loops with customers and other organizational units, or the deliberate distribution of tasks traditionally reserved for line management.

All in all, these companies show that self-organization is not rocket science. Customer satisfaction, employee satisfaction and profitability are by no means mutually exclusive. On the contrary: they form the cornerstones of a force field that thrives on customer proximity as well as on personal commitment and joint creative enthusiasm.

But as long as experts continue to be patronized, motivated people are bullied with bureaucratic guidelines, and managers are focused on remote control of subordinates, the evil organizational ghosts will prevail.

To put the good ones on the map, we need other forms of management. And for that we need a different understanding of leadership. But how does leadership take place in a self-organized environment? What needs to be considered? And what principles and practices have proven effective? These are some of the questions we want to answer in our next blog.